Organisations:

Berkshire Hathaway abandons bank deposit insurance

Berkshire Hathaway has told a Kansas-based subsidiary to stopped selling private bank deposit insurance above the amount guaranteed by the US government.

The move has led to speculation that Berkshire Hathaway founder, Warren Buffett, is worried about further bank failures.

Kansas Bankers Surety (KBS) has withdrawn its bank deposit guarantee bonds for new customers; the bonds backed deposits above the $100,000 limit that is guaranteed by the Federal Deposit Insurance scheme.

The firm also plans to recall existing policies and eventually withdraw from the market.

So far this year eleven US banks have failed, although some have been acquired and deposits have been made available to customers immediately.

The insurance offered by KBS was aimed at private banks that want to attract wealthy customers who can deposit well above $100,000.

Last month The Federal Deposit Insurance Corporation reported that its list of troubled US banks had risen from 90 to 117.

The organisation also warned that more banks will be coming onto the list as credit problems worsen.